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Paradise Papers Reveal U.S. Selling Russian LNG In Europe

The new massive data leak that has been making headlines for several days now has revealed that a company with U.S. ownership has been buying Russian gas and selling it in Europe at higher prices.

According to a report in Belgian daily Le Soir, taken up by other media outlets, such as The Guardian and Eurasia Review, Wilbur Ross holds a 35-percent interest in Navigator Holdings, a shipping company registered in the Marshall Islands.

According to the leaked documents, four cargo carriers owned by Navigator Holdings were used to load Russian natural gas at the port of Ust Luga before heading to the Anwerp LNG terminal in Belgium.

The documents suggest that a company with U.S. ownership is buying Russian gas from petrochemical giant Sibur, and then selling it—at a profit, of course—to the European Union, which is in a rush to build as many LNG terminals as it can in a bid to reduce its dependence on Russian gas.

If the reports are true, the situation is an ironic one for Europe: while trying to reduce its dependence on Russian gas it is inadvertently increasing it and is even paying more for it than it would if it bought the extra loads directly from Gazprom.

One might wonder how a U.S. company is able to do business with a Russian one. It’s simple: Wilbur Ross himself said earlier this week that Sibur is not a subject to sanctions, so for Navigator Holdings and the petrochemical giant, everything is business as usual. Related: Is OPEC Deal Compliance About To Crash?

Meanwhile, Gazprom is showing no concern whatsoever about potential challengers of its market share in Europe. Recently, the executive in charge of Gazprom’s export division, Elena Burmistrova, told media that there is nothing that can get in the way of Gazprom’s supplies of natural gas to the continent, even U.S. LNG, which some European gas consumers have hailed as a much needed alternative to Gazprom gas.

This alternative is for the time being more expensive than Russian gas, which makes it economically non-competitive. Yet, there are other drivers behind, say, Poland’s praise of U.S. LNG shipments—drivers that have to do more with history and politics than common sense—and this has increased the viability of U.S. LNG supplies to Europe. Even, as it may turn out, if they are actually Russian supplies sold by a U.S.-owned company.